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The world's 500 biggest companies have all fallen victim to typosquatting. OUT-LAW research has found that the fast-growing trend of making ad money from web domains similar to famous brands affects all the world's biggest firms.

Typosquatting is the profiting, through adverts, from websites whose addresses are very close to famous brand names. A typical site could be microsift.com. When visitors go to a typosquatter's site they see adverts which, when displayed, pay the site operator a small fee.

Though the money earned by each advert is often only a few dollar cents, the volume of traffic and the number of domains held by professional typosquatters means that some are earning millions of dollars a year.

OUT-LAW.COM analysed web sites relating to brand names held by the Fortune Global 500 biggest companies and the FTSE 100 biggest companies on the London Stock Exchange and found that every one of them had a brand which had fallen victim to typosquatting. The results are published today in the OUT-LAW Magazine and in weekly technology law podcast OUT-LAW Radio.

Many of the sites violate trade mark law because they involve the business use of a name that is very similar to a trade marked term.

"If you have a trade mark registration or common law rights and someone is trading under a name which is similar to the name you've got rights in, then providing they're trading in a similar area then yes it would be trade mark infringement," said Lee Curtis, a trade mark specialist with Pinsent Masons, the law firm behind OUT-LAW.

"If you had a typosquatter operating a website via a domain name that was one or two letters different to the trade mark owner's site and was obtaining advertising revenue that way on the back of that domain, then you could argue that they were using the brand in the course of trade. They'd then have a reasonable case of trade mark infringement and passing off," said Curtis.

Brand owners argue that their investment in building up familiarity with famous names is undermined by typosquatting.

The practice is relatively new, and has grown because the cost of owning a domain name has fallen to just $6 a year and internet traffic has grown exponentially. “It used to be that trade mark infringement was relatively unusual. Rarely would another company deliberately set out to copy another brand," said John MacKenzie, and intellectual property expert at Pinsent Masons.

"Now there are thousands of incidents, each using a very deliberate and carefully calculated approach. The solution is to think like the typosquatters. Lawyers need to adopt technology to automate their processes, and then hit them where it hurts – in the pocket.”

Christopher Bolinger is corporate counsel for trade marks for Viagra owner Pfizer and a member of the cybersquatting committee of the Intellectual Property Owners' Association (IPO). He said: "I think any confusingly similar variant of your brand in a domain name is infringement that dilutes your brand and ultimately left unchecked undermines revenue and undermines your brand equity."

"It weakens your brand. I think it's fair to say that damage to brands through domain name abuse has got to be in the millions of dollars if not billions of dollars," said Bolinger.

A common victim of typosquatting is Microsoft. It says that more than 2,000 domain names containing Microsoft trade mark terms are registered every day by other people. It believes 75 per cent of those are owned by professional domain name holders, and that 25 per cent of all Microsoft trade mark-related domains are held by cyber squatters.